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Builders & Real Estate Bulls Theory Proved Wrong

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Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
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  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    Originally posted by realacres View Post
    Union minister for surface transport Nitin Gadkari on Friday asked Navi Mumbai developers that providing affordable homes to residents was a profitable option than paying high interest rate to banks on the unsold stock and that catering to 1% population was bad business.

    "Everyone knows what is the true situation of the realty sector. You [real estate developers] may be claiming that you have recorded good sales, but I know for the fact what the ground reality is. Their are several homes which are lying unsold and developers are footing bank interest," said Gadkari during his speech after inauguration of the 15th Builders Association of Navi Mumbai property exhibition at Cidco exhibition centre in Vashi.

    The union minister said, "There is a need to incorporate new technologies in construction sector, which will bring down the costs, and as a result, will also prove to be beneficial for developers."

    He added, "Even today the developers think that one project should be able to earn them lifetime earnings. Those days are gone and you have to concentrate on increasing the turnover and maintaining the profit. How many people in the country can afford to buy homes worth Rs50 lakh and Rs1 crore? The number is hardly 1% and if you are constructing homes for that 1%, it is not going to be a profitable venture."

    Gadkari said, "Instead focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained," adding, "We are also in talks with the Reserve Bank to see how interest regime can be moderated and it will help the sector. But there is no point in sitting over unsold stock and paying interest to the banks."

    Building homes for 1% population is bad business: Nitin Gadkari | Latest News & Updates at Daily News & Analysis

    ^^ What do RE bulls want to say on this ??

    Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??

    Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???

    Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???

    What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by realacres View Post
      Union minister for surface transport Nitin Gadkari on Friday asked Navi Mumbai developers that providing affordable homes to residents was a profitable option than paying high interest rate to banks on the unsold stock and that catering to 1% population was bad business.

      "Everyone knows what is the true situation of the realty sector. You [real estate developers] may be claiming that you have recorded good sales, but I know for the fact what the ground reality is. Their are several homes which are lying unsold and developers are footing bank interest," said Gadkari during his speech after inauguration of the 15th Builders Association of Navi Mumbai property exhibition at Cidco exhibition centre in Vashi.

      The union minister said, "There is a need to incorporate new technologies in construction sector, which will bring down the costs, and as a result, will also prove to be beneficial for developers."

      He added, "Even today the developers think that one project should be able to earn them lifetime earnings. Those days are gone and you have to concentrate on increasing the turnover and maintaining the profit. How many people in the country can afford to buy homes worth Rs50 lakh and Rs1 crore? The number is hardly 1% and if you are constructing homes for that 1%, it is not going to be a profitable venture."

      Gadkari said, "Instead focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained," adding, "We are also in talks with the Reserve Bank to see how interest regime can be moderated and it will help the sector. But there is no point in sitting over unsold stock and paying interest to the banks."

      Building homes for 1% population is bad business: Nitin Gadkari | Latest News & Updates at Daily News & Analysis

      ^^ What do RE bulls want to say on this ??
      Gadkari is advising to the builder to build houses which have demand. "focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained". There is still a tremendous demand in affordable homes section. Obviously if all players try to gain market-share in one area and leave other area untapped then the inventory will be skewed.

      Supply and demand: Supply is more in one area and less demand while demand is more in one area with less supply. That means, affordable housing section too sees price rise.

      Gadkari may be true (I feel he his a very good administrator) but read an article posted a little earlier in this same thread
      Originally posted by herohiralal View Post
      In other unrelated news - unrelated cause it does not impact pune RE prices

      Lodha Sells Rs 500 Crore Worth Flats in 9 Days at Mumbai High Rise - NDTVProfit.com
      Last edited by gppande; December 22 2014, 10:52 AM.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Lodha Sells Rs 500 Crore Worth Flats in 9 Days at Mumbai High Rise - NDTVProfit.com - I guess demand is going down and RE prices are falling ;-) duh

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by herohiralal View Post
          Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??

          Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???

          Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???

          What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
          In haryana you get higher fsi for affordable scheme.

          All schemes launchedvso far are sold out in multiples of supply.

          And builders are making money in this scheme
          Venky (Please read watch a or before posting)

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by compuwalah View Post
            Lodha Sells Rs 500 Crore Worth Flats in 9 Days at Mumbai High Rise - NDTVProfit.com - I guess demand is going down and RE prices are falling ;-) duh
            I say very shady report.

            Absolutely no details more than this terse statement.

            And how were they able to sell these very same flats that were not selling before all of a sudden. Simply by using the term "online"?

            Online means what at this stage?

            What was the booking amount for each flat? What are the details of the buyers - are they proxies for the builders/brokers themselves?

            On the online platform this is done in various forms like click-fraud (for click-through revenue and click-based valuations), facebook type like-fraud (where sophisticated subject sites like Biochemistry got maximum likes from Egypt and Bangladesh - I'm sure there is lot of interest in advanced Biochemistry in rural Bangladesh! ).

            I believe this is one more ruse to use online platform to desperately claim abnormal sales of a normal asset out of the blue. Time will bear me out.

            cheers

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Rightly said wiseman. I called them up asking same. They said wiseman has not paid their salary for over six months and they will withhold the info for time being :-P

              Not sure if you read the news (before posting the knee jerk reply) that they we not able to sell since the clearance from aviation dept was pending. After that last clearnce has been been obtained, it was open for booking.

              Please find the relevant news and read it so that there can be some meaningful discussion.

              Otherwise we only have misguded personal opinions that have filled up pages of several threads.

              >> I believe this is one more ruse to use online platform to desperately claim abnormal sales of a normal asset out of the blue. Time will bear me out

              Yes sir. Just like it has done for last 5 years
              Last edited by compuwalah; December 22 2014, 03:43 PM.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Originally posted by compuwalah View Post
                Rightly said wiseman. I called them up asking same. They said wiseman has not paid their salary for over six months and they will withhold the info for time being :-P

                Not sure if you read the news (before posting the knee jerk reply) that they we not able to sell since the clearance from aviation dept was pending. After that last clearnce has been been obtained, it was open for booking.

                Please find the relevant news and read it so that there can be some meaningful discussion.

                Otherwise we only have misguded personal opinions that have filled up pages of several threads.

                >> I believe this is one more ruse to use online platform to desperately claim abnormal sales of a normal asset out of the blue. Time will bear me out

                Yes sir. Just like it has done for last 5 years
                Compu,

                I was only complaining because Lodha seemed to have paid your salary and withheld mine!

                But coming back to the topic, why the distraction about clearances not being obtained earlier, etc, etc?

                After all, even after clearances got cleared, it did not move in the offline way did it? And suddenly, it started to move in the online way?

                Surely, that clearances thing was merely a Red Herring, a distraction to draw discussion away from the point under discussion. Does clearances from Aviation Dept somehow make things happen in online while it has no impact in offline?!

                Luckily, on this forum there are only a few people who get fooled by such Red Herrings. Perhaps their salaries from builders makes them forget to use logic very easily, does it not?

                And if you are thinking of taking this flaming further, please note that it was "YOU WHO BROUGHT DISCUSSION TO ITS NEW LOW LEVEL BY INSINUATING THAT I WAS ON BUILDERS PAYROLL".

                I wish you would control your baser instincts (which so easily rises to the top every now and then) and continue to post at a correct level of propriety!

                cheers

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by herohiralal View Post
                  Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??

                  Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???

                  Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???

                  What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
                  That's the problem with RE bulls & this is what Gadkari has said.

                  More volumes & lesser profit. No one is asking for selling flats by making loss but the era of making 200% profit is now over.
                  If you are happy, you are successful.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by Venkytalks View Post
                    In haryana you get higher fsi for affordable scheme.

                    All schemes launchedvso far are sold out in multiples of supply.

                    And builders are making money in this scheme
                    Here is a good reports on affordable housing in Mumbai. Even MHADA houses are beyond the reach of people. When you have a pricing disconnect and housing is allocated by lottery then many people will bid hoping to get a piece of the lottery.

                    Unless the govt says we will give u an FSI of 5-6 for affordable housing an only 2-3 for normal housing dont expect the builders to change the habits. If the govt wants the builders to sell their houses then ask PSU banks to evergreen their loans and ask the RBI governor not to give bailouts.

                    http://www.praja.org/praja_downloads...n%20Mumbai.pdf
                    Attached Files

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by realacres View Post
                      That's the problem with RE bulls & this is what Gadkari has said.

                      More volumes & lesser profit. No one is asking for selling flats by making loss but the era of making 200% profit is now over.
                      So you think builders are making awesome profits. Weren't u the one who shared info about how stock price of RE companies is down 90%!!! So stock prices are down cause profits are so high??

                      Can you pls show how builders are making 200% profit?? Like proper annual reports or IRR analysis. Just not figments of your imagination.

                      Politicians make all kinds of statements - developed india by 2020, make in India. women empowerment, etc etc.


                      Again look at what they do and not what they say!!!

                      Comment

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